State of Accounting: Moving Boldly and Decisively Through Unpredictable Times

Custom Content by the Los Angeles Business Journal

The near-daily presence of words like “chaos” and “uncertainty” in political headlines may make for compelling television and click-worthy articles. But they also don’t help to create an ideal environment for many businesses to thrive.

Typically with any administration change, there is a call to action for business leaders who are concerned about where they see growth and opportunity and where there may be significant risk. However, it’s understandable that there could be more apprehension within the business community surrounding an administration that ran on a platform of disrupting business as usual, when it comes to national politics.

Business leaders may no longer be able to rely solely on past patterns as a guide to future possibilities when change feels unprecedented. Exploring a broad range of outcomes through scenario planning or related processes may help to combat the tendency to mistake the unfamiliar for the impossible.

In this regard, it can be helpful to consider what from the campaign may actually result in new policy, how global trade dynamics may change and how new policies might drive government spending and investment.

Leaders that formulate sound analysis of these questions could find themselves better positioned to succeed in tumultuous times. There may be opportunities for growth for organizations that can identify and take advantage of circumstances more quickly than others. When sudden and unexpected change occurs, there are often two dominant responses: Denial and paralysis. Both are natural tendencies, but they likely will do nothing to help a company gain or maintain competitive advantage.

Businesses that can quickly mobilize may find more opportunities for upside. Organizations that can move beyond denial and paralysis, recognize the many variables in play, and develop a plan of attack could be better positioned. Organizations that sit on the sidelines may see opportunity pass them by.

This is where bold, decisive leadership can play a huge role. It’s often easier to hesitate to watch and to wait, than weigh the risks of acting now versus waiting for clarity. But there’s never likely going to be a perfect data set that can inform the right decisions, and navigating imperfect information is not new for many boards or organizations. Leaders who act decisively are often the ones who will succeed.

They can no longer afford to take anything for granted because circumstances can change instantaneously and with little warning. This upheaval can upend the strategies they have in place. They should consider building their capabilities to anticipate, adapt, maneuver, make risk-informed decisions, and adjust course as needed to help their organizations become more resilient. They should look to develop scenario planning, simulations, and other tools readily at their disposal to support and accelerate this process.